Managing a Sustainable and Resilient Perishable Food Supply Chain (PFSC) after an Outbreak

Abstract

It is a challenging task to manage a perishable food supply chain (PFSC), due to the product’s short lifetime and to demand uncertainty. Even worse is the fact that, because of the multitude of participating stakeholders in production, distribution, and retailing, the PFSC becomes complex and thus particularly vulnerable to crises. Product shortages that result from an outbreak like COVID-19 often cause customers to seek alternative sources of supply, possibly with a larger purchasing amount (i.e., hoarding), leading to even severer demand uncertainty after the shortage period. To manage a sustainable and resilient PFSC after an outbreak, supply chain partners need to share and use the right information to facilitate decision making. A system dynamics simulation was thus applied to study a cheese supply chain with three tiers. Three scenarios that cause product shortages were simulated. Seven balanced feedback loops and two reinforced feedback loops were identified from the simulation model. Through the feedback loop dominance analysis, we identified four dominant loops that facilitate the generation of endogenous demand. In order to alleviate the negative influence of endogenous demand, it is suggested that the information sharing that causes endogenous demand be stopped and a loosely coupled strategy to support decision making utilized.